Two of Christchurch's large building companies have joined forces to produce factory-built homes in big numbers, branding it "a game changer for New Zealand housing market".

Mike Greer Homes and Spanbild announced yesterday their $14 million venture and said the factory in Christchurch will be complete and operating from December. They said the venture would be New Zealand's first big panelised building factory and able to build 1000 homes a year.

Mike Greer and Spanbild chief executive Peter Jensen said the public would not be able to pick between one of their factory built homes and a home traditionally built on site.

Jensen said there was a misunderstanding in the construction market between modular, transportable homes and a panelised building system.

Greer said the German technology with Spanbild's proven capability with manufacturing and Greers design creativity and experience would be "a game changer for the New Zealand housing market".

Building in the factory will reduce build time from 20 weeks to 12 weeks, he said.

Walls, floors and roof panels are wholly constructed in the factory with insulation, cabling, plumbing and plastering included. A truck delivers to site and a crane puts the house together.

Greer said the idea had been in the pipeline for a few years but the post-earthquake housing demand had motivated him to fast track the project. "We believe the time is right to help rebuild our city a lot faster."

They intend to invest in another factory in Auckland.

The two have set up NZ Panelised Buildings, 50:50 owned by each, for the business venture. It was launched yesterday by Prime Minister John Key at Spanbild's Waterloo Rd premises.

The factory would be fitted with specialised plant and equipment imported from German company Weinmann.

The planned 5000 metre squared factory, on an as yet undisclosed location, will have the capacity to churn out 1000 prefabricated homes a year to be marketed by Mike Greer and Versatile Home and Buildings.

Greer declined to say how much homeowners would save through the factory-built house but said quality would not be compromised.

"This machinery is far more accurate. We will be able to deliver homes so much faster. Because it will be in a factory environment there is less waste and more attainable for people," he said.

Greer said the factory can produce any type of house from simple two-bedrooms, classrooms right up to architecturally designed commercial buildings.

"The public won't be able to tell the difference between one produced by the factory and one produced on site," he said.